- The aggregate earnings have been quite stable in the past
decade. None of the companies reported a deficit during the
prosperous period 1961–69, but Chrysler showed a small
deficit in 1970. - The total growth—comparing three-year averages a decade
apart—was 77%, or about 6% per year. But five of the firms did
not grow by one-third. - The ratio of year-end price to three-year average earnings was
839 to $55.5 or 15 to 1—right at our suggested upper limit. - The ratio of price to net asset value was 839 to 562—also just
within our suggested limit of 1^1 ⁄ 2 to 1.
If, however, we wish to apply the same seven criteria to each
individual company, we would find that only five of them would
meetallour requirements. These would be: American Can, Ameri-
can Tel. & Tel., Anaconda, Swift, and Woolworth. The totals for
these five appear in Table 14-3. Naturally they make a much better
statistical showing than the DJIA as a whole, except in the past
growth rate.^3
Our application of specific criteria to this select group of indus-
trial stocks indicates that the number meeting every one of our
tests will be a relatively small percentage of alllisted industrial
issues. We hazard the guess that about 100 issues of this sort could
have been found in the Standard & Poor’s Stock Guideat the end of
1970, just about enough to provide the investor with a satisfactory
range of personal choice.*
The Public-Utility “Solution”
If we turn now to the field of public-utility stocks we find a
much more comfortable and inviting situation for the investor.†
354 The Intelligent Investor* An easy-to-use online stock screener that can sort the stocks in the S & P
500 by most of Graham’s criteria is available at: http://www.quicken.com/
investments/stocks/search/full.
† When Graham wrote, only one major mutual fund specializing in utility
stocks—Franklin Utilities—was widely available. Today there are more than- Graham could not have anticipated the financial havoc wrought by can-